Vietnam’s exports of wood and wood-based products in the first nine months of this year reached $5.55 Bn, an increase of 11.3 per cent over the same period last year, according to the General Department of Customs.

Total export turnover for 2017 is expected to reach $8 Bn—14 per cent higher than 2016—since Vietnamese companies usually export more in the last few months of the year, according to the Handicraft and Wood Industry Association of HCMC (HAWA).

The two-digit growth rate this year is possible because companies invested in technology and design, Huynh Van Hanh, deputy chairman of HAWA, said.

Many have expanded production and upgraded factories with advanced technologies. Others tripled capital investment, allowing them to obtain more orders. In the past, Vietnamese companies also manufactured according to the designs given to them but the new generation of managers is also coming up with designs under their own brand.

These products designed in-house can be sold 10-20 per cent higher than OEM products, said Huynh Quang Thanh, general director of Hiep Long Wood Processing, one of the factories in Binh Duong province that has invested in new technology and a design division. The company now receives orders from resorts in the US and Japan, worth $3-4 Mn for each job.

“Modern technologies are now affordable for Vietnamese enterprises and even small manufacturers can install new production lines. Previously, the productivity value per worker is worth $20,000 per annum. With advanced machinery, the figure is $35,000,” Hanh said.

In the domestic market, Vietnamese manufacturers are targeting the high-end market segment, which was previously dominated by imports. Some real estate developments now procure up to 80 per cent of its wood-based furniture from Vietnam.

According to Hawa, the domestic market grew by 5-6 per cent per annum while consumption is expected to increase to $2 Bn this year.

Imports have become less favoured because the products are not as diverse, and they are more expensive. Previously, the domestic market procured huge amounts of wooden furniture products, mostly from China.